Medicare Workers' Comp Settlement Bill Introduced

Bi-partisan legislation has been introduced in the U.S. House of Representatives that supporters say creates clear standards to ensure Medicare doesn't inappropriately absorb the cost of injuries covered by workers' compensation settlements.

Introduction of the bill–the “'Medicare Secondary Payer and Workers' Compensation Settlement Act of 2007″–is aimed at streamlining the current review process that critics say is an ungainly system that acts to the detriment of workers.

Sponsoring the measure–H.R. 2549–are Rep. John Tanner, D-Tenn., and Rep. Phil English, R-Pa.

The bill was lauded by both the American Insurance Association and the Coalition for Medicare Secondary Payer Reform. A third group, the Workers Injury Law and Advocacy Group (WILG)–the national association of attorneys representing injured workers in workers' comp cases–also voiced support.

The problem deals with regulations promulgated by the Centers for Medicare and Medicaid Services to enforce the Medicare Secondary Payer Act.

The law was passed to ensure that a workers' comp settlement sets aside a sufficient amount for medical care so the claimant doesn't eventually file a claim with Medicare for treatment of a workplace injury that should be covered by workers' comp.

CMS has established procedures to review workers' comp settlements of more than $250,000, involving workers who can be expected to become Medicare eligible within 30 months. The center said it needs to do so to ensure that Medicare does not begin paying for care until the settlement runs out, which is usually done through a set-aside trust.

The bill “will provide the clear and consistent standards now lacking in the CMS process,” said Douglas Holmes, president of Strategic Services on Unemployment and Workers' Compensation and coordinator of the Coalition for Medicare Secondary Payer Reform.

CMS “takes too long to review proposed set-asides, fails to provide consistent standards for determining amounts to be set aside and provides no avenue to appeal CMS determinations,” he added.

Mr. Holmes explained that the process results in injured workers not receiving funds, as well as additional costs for states and workers' comp payers.

He said it also results in additional liability for employers, insurance carriers and attorneys in contravention of the state workers' comp exclusive remedy principle.

“A legislative solution to this problem is needed,” according to Mr. Holmes.

The AIA voiced “strong support” for the legislation. It is a member of the Coalition for Medicare Secondary Payer Reform, headed by Mr. Holmes.

“The bill will provide the clear and consistent standards now lacking in the MSP approval process,” said Melissa Shelk, AIA's vice president for federal affairs.

“There are a number of costly problems and delays in enforcing the MSP for workers' comp settlements,” added Bruce C. Wood, AIA's assistant general counsel.

“This is a pervasive, national workers' compensation claims problem, and AIA has been working with a coalition of employers, defendant and claimant attorneys, and other insurers to address the situation for several years,” Mr. Wood noted.